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JUST WHAT THE INSURERS ORDERED — Federal health officials signaled this week that they’re considering relaxing the ACA requirement — known as the medical loss ratio — mandating that insurers spend 80 percent of all premium dollars on medical care rather than administrative costs. Pro’s Kyle Cheney writes, “The botched rollout of HealthCare.gov forced insurance companies to spend a lot of money — which under MLR would normally be considered administrative — to help the government rebound and sort out massive technical issues, potentially putting them on the hook to provide rebates. So the Obama administration is considering a plan that accounts for those ‘special circumstances.’ http://politico.pro/1fWxIk8

EXPANDED HARDSHIP EXEMPTION — The Obama administration has quietly extended a controversial exemption for two more years so that people who have had their health plans cancelled and claim a hardship exemption because of that now won’t face a penalty until October 2016. While House Speaker John Boehner suggested it could give Americans a way out of Obamacare’s unpopular individual mandate, the administration says the provision is limited. http://politico.pro/1cDjljX

SGR FORECAST: STORMY — Looks like a political miracle is in order. That’s about what it would take for Congress to pass permanent SGR reform before the temporary patch runs out at the end of March, lawmakers and aides say. Negotiations over paying for the legislation have become so stymied by partisan demands that its chance of success this month is quickly diminishing — and much of the latest finger-pointing is toward Democratic leaders in the Senate. http://politico.pro/1cDbJOh

Here at PULSE, we could not be happier that it’s Friday and St. Patrick’s Day weekend to boot. Have a great weekend, all. Kyle Cheney will see you back here Monday.

“Two drifters, off to see the world, there’s such a lot of PULSE to see.”

SEQUESTER DOESN’T APPLY TO ACA? — The administration has decided the mandatory spending cuts no longer apply to the health care law’s insurance cost-sharing subsidies, National Journal reports. The subsidies, which are available to low-income people to help cover their out-of-pocket health care costs, were taking a 7 percent cut last year because of the sequester, according to officials. But now the White House isn’t subjecting the subsidies to the spending cuts. The NJ article: http://bit.ly/1nSKnFJ

—The exemption slightly increases the percentage reduction that other mandatory programs will face, including risk adjustment and reinsurance payments, the Committee for a Responsible Federal Budget writes. Those two programs are set to be cut by nearly one billion in 2015 because of the sequester. http://bit.ly/1oRyuOK

HAPPENING TODAY — Mayra Alvarez, deputy director of HHS’ Office of Minority Health, will join House Democrats on Capitol Hill to talk about Latinos and the Affordable Care Act…the House plans to vote on the bipartisan, bicameral SGR replacement bill, paid for by suspending the individual mandate penalty for five years.

—On that note, the Committee for a Responsible Federal Budget has a blog post looking at that pay-for and the one being proposed by Democrats — capping future war spending levels — and concludes that both would worsen the debt. http://bit.ly/1kPTGr5

VA CUTS BRAIN INJURY FUNDING — The wars in Iraq and Afghanistan have drawn more attention to traumatic brain injury, but the Department of Veterans Affairs is cutting funding for TBI even in the wake of a departmental budget boost. Officials said this week that the cuts simply reflect process in treating those affected, saying there’s been an almost 70 percent decline in the number of severe TBI cases in recent years. Pro Defense has the story: http://politico.pro/1nVxnz6

LEADING DEMS SUPPORT MA CUTS — Fifty-five House Democrats have asked CMS Administrator Marilyn Tavenner to abandon proposed cuts to Medicare Advantage, but at least four of their colleagues want her to hold firm. Top Democrats on the Ways and Means and Energy and Commerce committees wrote yesterday that reversing course would raise premiums in traditional Medicare, increase costs for taxpayers and drain years from the solvency of the Medicare Trust Fund. Their letter to Tavenner: http://1.usa.gov/1nnpR2V

—Energy and Commerce Democrats also pushed back with a memo showing that MA plan enrollment has grown by a third and premiums have fallen by almost 9 percent since Obamacare was signed — although the administration essentially covered up most of the law’s MA cuts with a bonus program until this year. The memo: http://1.usa.gov/1fAwfPe

AFP HITS MARK PRYOR OVER OBAMACARE — Americans for Prosperity launched a major ad buy yesterday against Mark Pryor of Arkansas, who’s arguably the Senate’s most vulnerable Democrat. The buy pushes the group’s advertising in the race to more than $1.4 million so far this year. This second batch of ads, shared first with POLITICO, totals about $700,000 and links Pryor to the cancelled insurance plans under Obamacare. http://politi.co/1ihIVuI

THE RIGHT OBAMACARE MESSAGE — How do key voters feel about the Affordable Care Act? That’s a crucial question for House Democrats as they look for a way to blunt their Obamacare woes. The Democratic Congressional Campaign Committee, their campaign arm, is about to embark on a large-scale public opinion survey that will — in part — seek to answer that question. The DCCC is devoting much of its energy to uncovering how and how much it should talk about the battered health care law. http://politi.co/1iiT62j

FRIDAY LYRICS:

Monday: “Waters of March” by Antonio Carlos Jobim

Tuesday: “Dust in the Wind” by Kansas

Wednesday: “I Can See Clearly Now” by Johnny Nash

Thursday: “Magic” by Coldplay

Friday: “Moon River” by Andy Williams

** A message from AHCA. Skilled nursing has been tasked with a challenge: continue to improve quality care for millions of Americans and do so on razor-thin 1.8 percent margins. Even still, the long term and post-acute care profession continues to improve lives by delivering solutions for quality care. We are AHCA. And we are the solution. Learn more at ahcancal.org/solutions. **

REPORT: SHOP EXCHANGES ALL OVER THE MAP — The Obamacare insurance marketplaces for small employers — known as SHOP — are shaping up to be a wildly different experience in each state. The Commonwealth Fund is out with a report this morning indicating that the offerings are all over the map — Connecticut offers 12 policy options while Washington, D.C. offers 267 and Washington State has one insurer while New York’s got 10. In the SHOP exchanges, employers simply pick a tier of coverage like bronze or silver and let employees pick a corresponding plan. However, the report shows that a handful of states allow employers to go further and offer any plan available in the exchange, regardless of tier. A SHOP exchange map:http://bit.ly/1cXVZQX The study: http://bit.ly/1qAyExG

UNION ‘CARVEOUT’ — Nearly two dozen Senate Republicans urged the administration yesterday to rescind a rule exempting some self-insured health plans from paying reinsurance fees in 2015 and 2016. “We write to express deep disappointment that your agency has approved a final rule creating an unwarranted special carveout benefitting certain unions over other Americans,” Sens. Lamar Alexander, Orrin Hatch, John Thune and others wrote to OMB Director Sylvia Mathews Burwell.

'OPEN MIKE' LAUNCHES WITH MACON PHILLIPS — Check out the debut video of POLITICO's new weekly series, "Open Mike," featuring a conversation between Mike Allen and the digital diplomacy lead at the State Department, Macon Phillips. Watch Phillips' take on how social media and digital strategies are helping shape diplomacy in Ukraine and hear his thoughts on the popular Deathstar petition: www.politico.com/open-mike/

PLANNED PARENTHOOD ADS — Yesterday, Planned Parenthood announced a radio and Pandora ad buy featuring ACA enrollees from Texas and Ohio. The Ohio ads: http://bit.ly/1iH0bMH The Texas ads: http://bit.ly/1lCM6gU The group will also air Spanish-language ads in those markets.

SENATE PASSES CHILD CARE BLOCK GRANT — The Senate easily reached a simple majority yesterday to pass bipartisan legislation that would update a long-overlooked child care program for low-income families. The bill, the Child Care and Development Block Grant, has been hailed as a return to regular order for the chamber by leaders of the Senate Health, Education, Labor & Pensions Committee and Senate Majority Leader Harry Reid.

MANCHIN BILL WOULD BAN ZOHYDRO — Sen. Joe Manchin has a bill that would invalidate the FDA’s approval last year of the powerful new painkiller Zohydro, which the agency signed off on even though the drug lacks abuse deterrent features. And even though an advisory committee voted 11-2 against approval. The West Virginia Democrat had unsuccessfully pressed FDA to block the application and confronted Commissioner Margaret Hamburg on the issue Thursday outside a HELP Committee hearing. Rep. Stephen Lynch (D-Mass.) has a similar bill in the House. Manchin’s bill: http://1.usa.gov/1nnEweG

Victor R. Fuchs, a Stanford University professor, writes in The New York Times that the United States could save trillions by going to a government-controlled system. http://nyti.ms/1kQdOcF

Obamacare is weighing on the president's legacy for his last two years in office, the AFP writes. http://bit.ly/1eysAxb

#ASKPOLITICO TODAY AT NOON: Join POLITICO Magazine Editor Susan Glasser, author of the book “Kremlin Rising,” for a live Twitter chat on Russian President Vladimir Putin’s Ukraine gamble and the crisis in Crimea. Tweet your questions with hashtag #ASKPOLITICO.

** The skilled nursing and assisted living profession is not a bystander in the budget debate. Our long term and post-acute care providers know that smart policies result in better care and more balanced budgets. With operating margins teetering dangerously at 1.8 percent, we know that actions must take the place of rhetoric. Our profession is offering solutions to issues that make a difference in patients' lives and Medicare's budget, such as reducing hospital readmissions, improving patient outcomes and increasing quality care in America's skilled nursing and post-acute care centers. But these solutions are just the beginning. We are AHCA and NCAL. And we are the solution. Learn more at ahcancal.org/solutions. **